The Social Security Plans

Social Security was signed into law in 1935 by President Franklin D. Roosevelt.  Here is a video done by Bernie Sanders that discusses the issues, myths, and options for Social Security:

Some of the facts in the video:

  • Social Security is not going broke; it has a $2.8 Trillion surplus
    • Can pay out ever benefit owed to every eligible American for the next 19 years; until 2034.
  • Social Security is independently funded by the payroll tax.  What is not in the video is that the funding is broken down into the following percentages:
    • 85% comes directly from employers and workers (FICA tax) who contribute a percentage on earned wages up to the $118,500 cap (self-employed workers pay the SECA tax which is both the employer and employee contribution);
    • 12% comes from investment income from investment into interest bearing U.S. Treasury Bonds
    • 3% of its revenue comes from taxes that beneficiaries pay on their social security benefits
  • It has its own source of funding and does not add to the deficit
  • We have a retirement crisis in America today.
    • More than half of older workers between the ages of 55 to 64 have no retirement savings.
    • Millions have seen their pensions eliminated or severely cut back.
      • 18% of workers today have a guaranteed defined benefit pension plan; and that number is shrinking
    • Millions of seniors are living on incomes of $12 to $13 thousand a year
  • Average social security benefit is $1,328 a month
    • 1/3 of seniors rely on Social Security for virtually all of their income

Both Bernie Sanders and Hillary Clinton have similar Social Security plans.  Where they are the same:

  • Both will fight to keep Social Security and Medicare (Bernie Sanders wants to expand Medicare to everyone.)
  • Expand Social Security Benefits
  • Oppose efforts to privatize Social Security or raise the retirement age
  • Ask the wealthiest to pay more.

Below is a short video by Bernie Sanders that goes over his plan:

Where they are different:

  • Right now Social Security payroll tax is capped at $118,500.  Meaning that someone making $15 million pays exactly the same in Social Security tax as someone making $118,500.  Bernie Sanders wants to lift the cap for those making $250,000 and higher.  By doing so Social Security will be able to pay out every benefit for every eligible person for the next 50 years.  As he explains in this video:
  • Hillary Clinton just states that she wants to ask the wealthiest to pay more.
  • Bernie Sanders wants to raise the Cost of Living Adjustments (COLA), Hillary Clinton will fight to keep COLA from being lowered.  Below is Bernie Sanders video on the Zero COLA that happened in 2016:
  • Bernie Sanders wants to also do the following:
    • expand benefits by an average of $65 a month
    • increase the minimum benefits paid to low income seniors.

Senator Sanders has introduced legislation in 2015 that would accomplish his goals.  In response to a request by Senator Sanders the Social Security Administration reviewed his plan and found that the taxes proposed would raise an additional $11.9 trillion over 75 years.  The additional benefits he proposes would cost $3.4 trillion.  It would net the fund $8.5 trillion.

If no changes are made Social Security can continue to pay out in full every benefit owed to every eligible recipient for the next 19 years.  With Senator Sanders changes to Social Security it extends out the ability to pay in full to 50 years.

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